Running Head: GE’S HRM STRATEGY AND BUSINESS GOALS ALIGNMENT

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How General Electric’s Human Resource Management Strategies Align with the Organizations Goals and Objectives GB520: Strategic Human Resource Management: Team B Kaplan University March 18, 2011

national and global levels. Training and Development. and improving quality. It has a number of subsidiaries under 5 main umbrella corporations. Recruitment and Selection. we examined specific strategies. General Electric strives to develop products using imagination and innovation to solve the world’s toughest problems. In 2009 GE grossed $35. . has become a global leader in innovation for the past 130 years. Manpower planning plays a vital role in attempting to identify the general directions and trends projected for manpower resources in the future whereas.4 billion by marketing varied products and services from windmills to nuclear power turbines. In order to determine whether or not General Electric’s human resource strategies were aligned with their business strategies. GE believes that financial and environmental performance can work together to grow the company and solve problems (GE Citizenship. started by Thomas Edison in 1878. 2011). manpower forecasting deals with the quantitative forecasts of manpower trends for specific periods of time. GE is working to make long lasting health a possibility through products and technology geared towards lowering costs. Generally. produces and markets products in 160 countries. and Compensation and Benefits. regional. Manpower Forecasting Manpower forecasting simply is the estimation of future employment needs and the ability to predict the future levels of employees/workers that will be needed due to demand and the supply of skills at the organizational. Finally. fans to light-bulbs and a vast selection of jet engines. Those strategies were Manpower Forecasting. the quantitative predictions are forecasted for one to five years in the future.GE’S HRM STRATEGY AND BUSINESS GOALS ALIGNMENT 2 How General Electric’s Human Resource Management Strategies Align with the Organizations Goals and Objectives General Electric. GE currently develops. touching lives.

or demotion. how the organization can go through the distribution and control of its manpower resources and forecasting to better assist the organization. a) define skill categories in the GE organization in terms of kind and amount. manpower forecasting and manpower planning play a key role by which GE prepares an inventory of critical skills and potential availability in the GE organization. c) voluntary resignations. and those areas in which separate forecast of manpower resources are anticipated. d) involuntary attrition due to discharge. It comprises the use of the concept of planning to visualize via trends and analysis. both new college graduates and experienced personnel. and c) identify dynamic factors which determine whether the right skills are at the right places at the right time. and c) new hires. The outflow factors are a) skills development. Forecasting is an invaluable tool at GE because it informs senior management and equips them with the necessary data on human resource planning to immediately . leading to promotion and upgrading to other skill categories.GE’S HRM STRATEGY AND BUSINESS GOALS ALIGNMENT 3 The manpower forecasting model should be able to. b) lateral transfers to other locations. e) retirement and f) death. b) lateral transfers into the skill – forecasting category from other company locations (not involving skill upgrading). On another note. An important aspect of manpower forecasting is the predictions that can be tested and evaluated overtime against the trends as the future years come to fruition. In summary. Manpower forecasting has different factors that are major players when forecasting. The input factors are a) skill developments resulting in upgrading and promotion into the skillforecasting category. The input and outflow factors are used to decipher the critical skill categories that are being forecasted. the trends can be revised when identifiable gaps in the predictions are noted. b) identify areas of the GE organizations operations which are relatively self-contained units in terms of manpower. Layoff.

GE will give you the education you need to be the best at what you do and prepare you for your future. (Bassett. and Executive Development. The Business Management course was designed to help train tomorrow’s general managers to compete in a global market. Succession Planning is serious business at GE. . This leads to a 95% retention rate. GE began their succession planning program in the mid 1900’s and it was “not confined to only the top management but was applied across all tiers of management” (Radhika. The Manager Development program is aimed at the new managers that need to learn how to manage a multi-functional organization. “Approximately 90% of GE’s top 600 leaders are promoted from within” (Lynch. Forecasting also is used as an early warning as to the possibility of layoff or heavy hiring needs that will permit the Human Resource department to plan sensibly and provide lead-time to be ready for contingencies which have lacked in the past. Succession Planning The purpose of succession planning is to ensure the company has the talent to fill vital roles in the company today and well into the future. Part of this program also includes the Impact program that moves executives across multiple GE businesses to gain an understanding of the diversification of the businesses GE operates. Succession Planning for GE consists of Manager Development. Succession planning is given a training budget of over $1 billion dollars annually. 1973). The managers would then take what they learned and apply it in a month long project. 2008). Classes in strategic marketing and organizational change were required. The Executive Development Program was a combination of the above programs and is held at GE’s state of the art training facility known as Crotonville in NY. 2004). From department manager to executive.GE’S HRM STRATEGY AND BUSINESS GOALS ALIGNMENT 4 assess the organization at a glance and in the future years. Business Management.

(2006 Best Places to Work. If the candidate is a good match for the position that they are applying for. On-campus recruiting is a program that allows GE to send company recruiters to schools across the nation to find talent at universities. internal postings. GE really stresses to Never Stop Learning! Recruiting and Selection General Electric has approximately 3. 2011) The selection process at GE begins when a resume is submitted. Military Veterans.000 employees in over 100 countries. (U.GE’S HRM STRATEGY AND BUSINESS GOALS ALIGNMENT 5 The John F. This allows GE to meet a large number of individuals who could be candidates for employment. Welch Leadership Center at Crotonville was established in 1956 on a 53 acre campus and was the first of it’s kind. they will be given a first interview. job boards. GE offers flexible schedules and programs to specifically attract military veterans. GE looks to hire the brightest talent to help them attain their goal of creating products to solve the world’s hardest issues. GE recognizes the loyalty and strategic thinking that the military has helped develop in these veterans. They employ over 11. and its company website. Their availability .000 military veterans and were named a military friendly employer. In the year 2006 GE recruited at approximately 125 schools. With the center as the epicenter of GE’s training initiatives. It is a good opportunity for both parties because GE finds potential talent and the students learns about the benefits of working for GE. It also allows GE to inform these potential candidates about their company. The first interview is used to determine the qualifications and interests of the candidate. GE has programs in place to find and recruit their talent. 2006) GE also recruits military veterans. GE recruits through oncampus recruiting. From these schools they extended job offers to students at 109 of the campuses.S. Once a resume is submitted in many cases the candidate will be asked to take a questionnaire.

(2006 Best Places to Work. GE has a program called the Experienced Commercial Leadership Program (ECLP) that hires approximately 120 candidates each year. Hiring General Electric’s recruiting and selection practices help them to find the best and brightest employees.GE’S HRM STRATEGY AND BUSINESS GOALS ALIGNMENT 6 may also be discussed in this interview. 2006) GE’s hiring process includes internships and co-ops. GE Capital. Technology Infrastructure. Candidates with degrees in business and engineering were the candidates that were the most hired in 2006. and analytical skills. 2006) This shows that GE is committed to hiring quality employees to help them attain their goals. Internships and co-ops allow employees to get experience with the company. The second interview is often conducted at the site that the candidate would be working at if they were hired. GPA. The candidates that best fit the company and are the most qualified will receive an offer for employment. The candidates are hired into the division based upon their preferences and the needs of the company. These divisions are Energy Infrastructure. This supports GE’s goal to develop products to solve the world’s problems. Training and Development . (On-Campus Recruiting. GE has many different divisions that they hire for. The ECLP is one of these programs. and NBC Universal. Internship programs allow the employee to become familiarized with the company and allow the company to see what the employee can do. 2011) When selecting candidates for employment. The candidates that make it past the first interview will move on to a second interview. (Careers at GE. The internship will give the employee the training and tools they need to further their career. GE looks at the candidate’s college major.

Abu . 2011). the Functional Skills Program attempts to engrain leadership skills. Ralph J. This program provides tools for leading specific functions. The company President at that time. Welch brought the company to the realization that the market had moved to a global front. Conceptually. New York. Welch Leadership Center at Crotonville in Ossining. Cordiner was searching universities for these kinds of managers. These courses are not only offered in Ossining. Secondly is GE’s Functional Skills program. Currently the program is in its 55th year of executive education and leadership training. during which time the company was more centralized but still looking for an edge in expansion. New York. the company would have to intensify its management training and development in each division. the company would go from employees choosing which courses they wanted to being tasked with doing them. but then made the decision to develop its own and create its own center. and that in order to stay in the game. it fosters forwardthinking skills in leaders at all levels (GE Citizenship.GE’S HRM STRATEGY AND BUSINESS GOALS ALIGNMENT 7 The training program at GE consists of three major strategies. The first-Crotonville Leadership. 2006). Like the other programs and courses offered by GE. citizenship. Currently the center ‘s philosophy is in sync with the organizations and GE currently spends over one billion dollars annually on training and development of its employees and future leaders (Durret. and ethical practices and morals into each of its pupils. Lastly is GE’s business knowledge programs and course offering. By the time Jack Welch took over as president in 1981. Crotonville leadership was developed in order to train managers to run and open additional divisions available to General Electric (GE) in 1950. from finance and human resources to operations and engineering. but also around the world in cities such as Shanghai. which enhance employees’ business acumen and their knowledge of GE products and services.is named after the original location of General Electric’s executive education at the John F.

GE utilizes the most sophisticated research available and obtainable to utilize in training its managers both globally and locally. 2011). GE has demonstrated its dedication to training and development. and maintaining competence and speed while respecting others and connecting with society (GE Citizenship. its Functional Skills Program.8 Dhabi. it also recognizes that it has much to learn. The company has expanded its efforts to training and development to these GE’S HRM STRATEGY AND BUSINESS GOALS ALIGNMENT places and others in order to prepare its organization as a whole for the evolution of globalization of the marketplace in which it resides. it is constantly attempting to “evolve” its executives to be the most advanced in their field and its holds these same standards in its recruitment efforts in all position levels. and MIT. It has three main programs. While GE recognizes its educational facilities offer outstanding curriculum. portraying a sense of confidence in ambiguous environments. GE holds the objective of forward thinking as the basis for al training and . In addition to education and training efforts. In doing so it has discovered cutting edge approaches to leadership and technology. inspiring by example and vision. and its Business Knowledge Programs that are used to implement quality and innovation in its prescribed curriculum content in each course. Through programs like these. Currently its main agenda is to hone in on leadership qualities such as good listening skills. West Point. it continuously reaches outside of its company walls for innovative solutions and research in an effort to develop the most advanced curriculum through companies such as Google. it has taken the training a step further by ingraining the type of training offered to the needs of the employee being trained. The Leadership Center at Crotonville. Overall. 2011). For this reason. Included in the expansion plans are the incorporation of its educational facilities into its research centers in both Brazil and Michigan (GE Citizenship. and Bangalore. Because the company has a “forward thinking agenda.

and has continuously proven itself the leader in these arenas amongst its peers. it must be done fairly to the employee’s satisfaction and to the organizations overall benefit. A good compensation package also lets the employee know how valuable they are to the organization.). They want to be able to provide competitive yet fair wages for their employees. build and lead? GE’s website states that its goal is to make money.d. solve. According to 2006 Best Places to Launch a Career (n. it is also balanced and focused at the same time. How do GE’s HR strategies regarding compensation and benefits support their mission to imagine. One of the most important factors of any HR strategy is compensation.). Employers need to ensure that however their employees are compensated. They accomplish this goal by looking at each employee as an individual with individual needs. thereby ensuring that wages stay fair for the individual and the organization. the average GE employee makes . Compensation programs at GE are designed to attract and retain the world’s most innovative talent who can work together sustain the value of the organization. Compensation and Benefits In order to correctly determine whether or not GE’s human resource management strategies truly align with the organizations goals and objectives one must consider HR strategies on compensation and benefits. Employees need to know how they will be compensated for the roles they perform. GE attempts to make their compensation packages the most competitive in the industry. do it ethically and make a difference. Compensation is both discretionary and transparent.GE’S HRM STRATEGY AND BUSINESS GOALS ALIGNMENT 9 development tactics. According to the GE website under Compensation & Sustainable Performance (n. but remain competitive in order to attract the world’s best talent. I believe that their strategies around compensation and benefits support these goals.d.

2010. In February 2010. The primary responsibilities of the MDCC are to 1) establish. 2) monitor management resources. 3) review the incentive compensation process to ensure that it does not encourage unnecessary risk. develop and maintain management structure. p 17). GE instituted contingent long-term performance awards that they made available to about 1000 executives in the company. that was between $2K to $6K more than the average median income of the same year (Median Income. In an effort to meet this standard executives at GE are required to own large amounts of GE stock and “other equity with long vesting periods” (GE. corporate strategy and senior executive compensation (Compensation & Sustainable Performance. GE values quality performance of their executives measured overtime.). 4) and review and discuss at least annually the relationship between risk management processes. review and approve senior executive compensation. Compensation for senior executives at GE is overseen by the Management Developmental and Compensation Committee (MDCC). monitor the development and selection of executive management and monitor performance. 2) 2012 industrial return on capital.). This contingent award is based on the performance of these executives over a three-year period. starting in 2010 and finishing up at the close of 2012. and 4) ending net investment of GE capital .d. The executives are rated on their performance over four business measurements.d. Executives are also encouraged to stay with GE by “pension benefits that are only earned and become payable annually if an executive successfully works with the company to age 60” (GE. Compensation is based on the premise of long-term performance and discourages taking risk in order to optimize short term gains.GE’S HRM STRATEGY AND BUSINESS GOALS ALIGNMENT 10 between $50K to $54K per year. oversee succession planning. n. 2) cumulative industrial cash flow from operating activities. 2010. p 17). n. These measurements are 1) cumulative earnings per share.

country regulations and cultural practices. Benefits are another component of GE’s HR strategy. Major of components of GE benefits packages include health. With the philosophical buy-in to the concept of long-term growth over short-term gains in the organization’s most senior ranks. benefits packages are also competitive enough to attract the best talent and are individualized for each employee in the organization. dental and vision coverage. Of these. These measures directly align with GE’s goal of GE’S HRM STRATEGY AND BUSINESS GOALS ALIGNMENT long-term financial health.000 employees worldwide. The CEO of GE. These plans meet GE’s pension obligations to over 635. pension and estate planning. GE’s pension plans are designed to reward employees for their service to the company after they retire. p 27). n.d. They are individualized to meet each employee’s needs. Benefits packages vary significantly based on local business environments.). GE benefits are designed to benefit the individual employee so as to allow the employees to make the best decisions possible for themselves and for their families. Jeffery Immelt. GE’s goal is to provide packages that benefit the employee beyond their paychecks and bonuses (Employee Benefits. n. but are essentially broken down to two main groups. GE believes that their people are their best assets.11 (Compensation & Sustainable Performance. The first group are plans that are based on an employee’s earnings. Like compensation packages. . 2010. it creates an example for junior executives to follow and thus indoctrinates future generations to the organizations goals and objectives. believes so strongly in the concept of long-term performance awards that he has refused to take a cash bonus in upwards of $5 million dollar for the past two years in a row and has not allowed his salary to be increased since 2005 given that he believes his value cannot be adequately judged in his short tenure as CEO of the company (GE.). health coverage and pension planning are the most important.d. And given this philosophy.

PPO. GE transitioned all health coverage from traditional managed care plans. Although. Other vital components of GE’s benefits strategy are their health coverage plans. regardless of role. to what they refer to as consumer directed health plans. These plans benefit employees who have remained loyal to the organization over time (Lister. Recently. feelings about these plans vary from employee to employee. Both types of pension plans support GE’s strategy of rewarding individuals for success overtime while preventing unnecessary risk in order to capitalize on short-term gains.e. but the company will match employee contribution to their health savings accounts up to $1000 per year. Some estimate a $1 billion savings to the organization over the next 10 years (McGregor. Deductibles can be as high as $4000 per individual. etc. i.GE’S HRM STRATEGY AND BUSINESS GOALS ALIGNMENT 12 These plans benefit those higher up in the company with higher salaries. The second group are plans that reward tenure in the company. These plans allow the employee the financial freedom to chose which benefits would be more appropriate for their individual and family needs. the savings to the organization are unquestioned. These plans pair high deductible plans with health savings accounts. Deductibles vary and premiums are set based on the deductible level chosen. 2010). 2009). . and offer lower premiums and employer matching to help cover the cost of the deductibles. HMO.

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